Motorola: Android device launches get us back in the smartphone game

Updated: Motorola's Sanjay Jha, co-CEO and head of the company’s mobile device unit, says that new Android-based smartphones are on track for the holidays. Jha added that Motorola is planning a barrage of Android-based devices that will put the company back in the smartphone race.

Updated: Motorola's Sanjay Jha, co-CEO and head of the company’s mobile device unit, says that new Android-based smartphones are on track for the holidays. Jha added that Motorola is planning a barrage of Android-based devices that will put the company back in the smartphone race.

"We will have two Android devices (for the holidays in the U.S.)," said Jha, adding that deals are already in place with two major carriers with more to follow. "We also have plans for more devices in the first quarter of 2010."

Jha said Motorola's Android devices will combine the best of the Internet, messaging and social networking in an intuitive interface. Jha also touted Motorola's collaboration with the Android community and Google. "We expect the ecosystem to continue to gain consumer traction," said Jha, who is aiming for "more user stickiness and a lasting relationship with the consumer."

The Android launches "will get us back in the game in smartphones," said Jha, speaking on a conference call with analysts. Jha noted that the company plans to take Android into everything from smartphones to feature phones. The overall mission is to increase average selling prices and margins on handsets. Simply put, Motorola will be on the front lines CNet News' Matt Asay reckons is an Android 2010 assault on the iPhone.

Jha has a lot riding on Android and Motorola's handset launches. In fact, Motorola's handset business depends on Android. In its second quarter earnings results, Motorola said that its mobile device sales were $1.8 billion, down 45 percent from a year ago. The operating loss for the quarter was $253 million, better than the $346 million loss a year ago.

In many respects, Motorola resembles Palm before the Pre launch. The company is losing money and market share as it preps a series of savior devices. Motorola shipped 14.8 million handsets in the second quarter and has a global market share of 5.5 percent. Jha said the handset market stabilized in the second quarter and Motorola was strong amid "certain prepaid customers."

Motorola did have a few mobile device successes in the second quarter. Motorola launched the iDEN Clutch i465, a device that is sold through Sprint's Boost Mobile unit, which had 938,000 net customer additions in the second quarter. Morgan Keegan analyst Tavis McCourt figures that as much of a third of Motorola's handset sales were due to Boost Mobile.

For the second quarter, Motorola as a whole topped estimates. The company reported net income (from continuing operations) of $26 million, or a penny a share. That tally includes a net 2 cents a share of one-time gains. In any case, Motorola's results were better than the loss of 4 cents a share expected by Wall Street, according to Thomson Reuters. A year ago, Motorola broke even in the second quarter.

Revenue for the three months ended June 30 were $5.5 billion, lighter than the $5.6 billion expected by Wall Street.

Motorola's stronger divisions--home and networks mobility and enterprise mobility---also saw sharp revenue declines in the quarter.

The home and networks mobility unit had second quarter sales of $2 billion, down 27 percent from a year ago. Operating earnings were $153 million, down from $245 million a year ago. Motorola said the unit shipped 3.7 million digital entertainment devices.

The enterprise unit saw second quarter sales fall 17 percent to $1.7 billion. Operating earnings were $227 million, down from $377 million a year ago.

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